Now, I want you close your eyes. Think about the house you would want to live in for that insane amount of money. Probably fairly big, lots of room to have your parents and friends over. Nice appliances, great neighborhood, decent schools. You've worked extremely hard and sacrificed a lot to save up the $54,900 down payment, and possibly put yourself through grad school to land a job paying the required $136,000 annual salary.
Now open your eyes. Is this what you imagined?
Address: 1533 E. Broadway, 90802
Wishing Price: $545,000
Size: 2 beds, 2 baths, 1200 sq. ft. (built in 1918)
$/Sq. Ft.: $454 (!)
Purchase price: N/A
Purchase date: N/A
MLS#: R704655
On Redfin: 260 days
Description: Buy, LEASE or LEASE TO OWN! OWNER WILL CARRY BACK with the right deal!All new windows, skylights, tile roof, new cooper plumbing, new electrical - this is a NEW HOUSE. Great back yard and patio too! This home has a 'dual land use' - check with city, but the commercial zoning allows you to operate a business such as Hair & Nails, Accouting/Tax Prep, Real Estate, Food Service, Etc. .. This is a wonderful home located in the heart of Alamitos Beach. (MOVIE AVAIL. On this Property)
Where do I begin? By the way, I know real estate agents and they are bright, hardworking people, but this type of listing makes me wonder if there are any standards at all for this line of work anymore. In fact, this listing is so bad, I'm going to pick it apart line by line:
Buy, LEASE or LEASE TO OWN! OWNER WILL CARRY BACK with the right deal! I WAS BETTING ON REAL ESTATE TO ALWAYS GO UP, JUST LIKE MY REALTOR AND "FLIP THIS HOUSE" TOLD ME. BUT NOW THAT MY LOAN IS RESETTING IN MARCH, I'M DESPERATE AND WILL DO ABSOLUTELY ANYTHING TO PUT A TOURNIQUET ON THIS BLEEDING, FESTERING WOUND OF A HOUSE. PLEASE!
All new windows, skylights, tile roof, new cooper plumbing, new electrical - this is a NEW HOUSE. A roof ain't cheap, and new windows definitely add serious value. I'm not sure what "cooper" plumbing is, but it doesn't sound like a good thing. "This is a NEW HOUSE"...just make sure to disregard the 1918 build date. Move along, nothing to see here.
Great back yard and patio too! Are those Christmas lights hanging from the roof? The back yard is a decent selling point, actually. Seems they should have spent more time staging it.
This home has a 'dual land use' - check with city, but the commercial zoning allows you to operate a business such as Hair & Nails, Accouting/Tax Prep, Real Estate, Food Service, Etc. .. Awesome! Yet another property with a sizable "benefit" in addition to the considerable pride of ownership. I've never heard of "Accouting" but it's never too late for a career change. Food Service, eh? If the parking wasn't so horrendous in this area, I could open a Wendy's.
This is a wonderful home located in the heart of Alamitos Beach. UPDATE: There has been some debate on this blog about the actual borders of Alamitos Beach/Belmont Heights/Alamitos Heights, but I am of the opinion that sometimes listing agents will throw the name in of a more appealing neighborhood to benefit from the better connotations of that higher-valued area. For example, this listing,
http://www.redfin.com/stingray/do/printable-listing?listing-id=1235221
shouting distance from the featured property, lists "Belmont Heights/Alamitos Heights." But wait, didn't the seller of the first property claim it's in the heart of "Alamitos BEACH"--the more appealing neighborhood? Case and point. From what I see, the Heights area is improving, but generally, especially as the area creeps closer to downtown, it's not a place I feel safe walking down the street at night, and I certainly wouldn't park my car on the street.
(MOVIE AVAIL. On this Property) Huh?
The pictures are odd. It seems like a decent (if unbelievably overpriced) house. Nice hardwoods, decent cabinets and appliances (but awful hardware and too much Ikea furniture to qualify as a decent staging effort), yet they feature a crap-filled attic and strangely none of the bathrooms. For a supposedly "NEW HOME," doesn't it strike you as a little suspicious that no bathrooms are pictured?
With no sales data, I can only guess this is a flipper who watched too many TLC shows and got himself into a financial catastrophe he didn't anticipate. The monthly carrying costs on this place are more than $3,500. Do you think that sounds like a reasonable monthly rent? No? Then I'd surmise there's a hefty negative cash flow on this property. I'd love to find out what the flipper's--I mean, seller's, proposed lease rates are.
At $454 per square foot and 260 days on market, this thing isn't going anywhere. Sometimes I get the feeling owners just aren't serious about selling. I don't care how close you are to Belmont Heights, in this zip code the median household income is $30,353. This house is probably slightly above median considering the minor updates, but even if the median income were $50,000 a year, this thing wouldn't be priced more than $250,000.
That means this little buddy will need at least a 50% price reduction to make anything close to financial sense. That would put it at $208 per square foot. That may sound dramatic, but consider it's a big deal when Irvine and to some extent Huntington Beach drop below $300 per square foot. I love Long Beach, but if I could get a condo in a nice area of Orange County for less than a 90-year-old stucco box in a questionable LB neighborhood, there is no question where I'd live.
Quickly, here is a comparable property in Irvine with an asking price of 549,000.
It's a 2 bed, 2 bath in a clean, safe area. It still may sound expensive for 1,100 square feet, but consider the $82,000 median Irvine income has a more realistic chance of supporting the price, as opposed to the Long Beach property.
Sure, I guess you can't open a nail salon in the back of the Irvine place, but this comparison clearly illustrates the informational/psychological barriers at work in Long Beach, and the inability to understand how the ensuing real estate deflation in nicer, more desireable surrounding areas will absolutely punish Long Beach prices.
You really don't know Long Beach at all, do you?
ReplyDeleteAlamitos Beach is listed when sellers just can't make the stretch to "Belmont Heights." A primary example of Good to Ghetto in 2 blocks is this area. Generally, anything north of Cherry Ave. is awful. Especially as you get closer to the beach, the parking is absolutely horrendous. The area is improving, but it's definitely not a place I would feel safe walking down the street at night, and I certainly wouldn't park my car on the street.
I don't profess to be an expert on every detail of Long Beach neighborhoods.
ReplyDeleteHowever, I don't see how your criticism of my lack of detailed familiarity in any way discounts my points. In fact, I would argue my unbiased perspective gives me an advantage in assessing the real estate market. That I am not intimately familiar with every aspect of Alamitos Beach does not nullify my opinion that it is a bad idea to park a nice car on certain streets.
I value contrasting opinions and I'm glad you found the site--especially since your perspective has already provided some helpful corrections. I hope we can have some productive debates.
Well, I've lived in the nicer part of Long Beach (PCH and Park, Palo Verde and Carson) and the bad part of Long Beach (Loma and PCH, Elm and 7th). I now live in Aliso Viejo and I'm glad I made the switch. I miss second street, my friends and family who are still back in Long Beach but Orange County seems to be so much cleaner.
ReplyDeleteSure you lose a backyard when you move behind the Orange Curtain but you gain cleanliness, safety, newer and well planned out homes, and a good community.
A little part of me misses Long Beach but now that I have a family, I think Orange County is the right place to be.
oh see,
ReplyDeleteYou made a great point: "...now that I have a family, I think Orange County is the right place to be."
That is a sentiment shared by many, and the reason OC prices are generally much higher than LB, and always will be. However, LB real estate is in a strange limbo where houses that would have been considered sub-median properties five years ago now command higher per square foot prices than some Orange County communities.
I have theorized that because Long Beach didn't experience a housing bubble as dramatic as Orange County, the decline hasn't been acknowledged or felt yet (just as San Diego, Riverside and Sacramento were the first to experience insane easy-credit-fueled appreciation, they were the first to experience the crash).
Consequently, there is a distinct lack of media coverage and information about how the deflating housing values in nicer, cleaner, more desirable communities will affect Long Beach prices.
That is the impetus behind this blog: How can Long Beach sellers justify prices similar (and in some cases dramatically higher) than those in, say, Aliso Viejo?
Actually I was referring to the fact that Cherry is a North/South street, Alamitos Beach is West of Cherry, Belmont Heights is East of Cherry and in Long Beach the Ocean is South.
ReplyDeleteAlso
Your statement "Alamitos Beach is listed when sellers just can't make the stretch to "Belmont Heights." A primary example of Good to Ghetto in 2 blocks is this area" makes absolutely no sense when you consider that Belmont Heights and Alamitos Beach are completely different neighborhoods.
The one justification.............land. When you take two Long Beach houses, including front and back yard, put them side by side, you have the same square footage as 6 Aliso Viejo homes.
ReplyDeleteI myself would love a larger back yard but it's not as important as having a two car garage I can park my cars in and a well layed out, two story home.
Don't get me wrong, I like the houses in Long Beach but your analysis of the LB home for $549,000 vs. the Irvine home for the same price says it all.
The bubble seems to be hitting the OC market much harder than the LB market but you are correct, it will catch up to the LB market very soon.
If I were without wife, kid, and dog I would have sold my home the minute Countrywide went out of business, sat my ass in a nice apartment while me equity accumulated interest, then saved up to by a home 1 1/2 the size of my current home for less money. That being said, I can't move the family and dog to an apartment so I will be stuck in a rut with all the other people who got into the housing market at the wrong time, just as I did.
Laurie,
ReplyDeleteMy inner compass is admittedly imperfect (I asked for a GPS for Christmas), thank you for the clarification.
Your point about Alamitos Beach is a fair one. Correct, Alamitos Beach and Belmont Heights are different neighborhoods.
However, my point still stands that the borders of Belmont Heights seem to span awfully far these days--especially observed in rental listings.
In LA there is a "city" called "Beverly Hills Adjacent." A clear attempt at piggybacking on the great connotations associated with 90210. However, the city is "Los Angeles" no matter how you slice it.
My point, which perhaps isn't clear in the post, is that by and large, I would guess Alamitos Beach residents would rather be considered part of Belmont Heights--to the point where sellers will "fudge" the borders and add "Belmont Heights" to the listing--although it is clearly smack dab in Alamitos Beach/Alamitos Heights.
GHETTO, walk safely? - My family and have lived 1 block away from here (maybe 3 at First & Hermosa) for 6 years. I have 4 kids... we walk to Ambrosia, to Two Umbrellas to Tai at any time.... My kids play at Cherry Park, Skate, ride their bikes...
ReplyDeleteAt 40 something I skateboard with my 14 yr old son all around, we also ride our bikes. Our Boat is in Shoreline Marina I walk to the office @ 555 E. Ocean Every Day, I can walk across the street to the Marina and do at least 2 times a week. WE LOVE LONG BEACH!
Keep the OC folks in OC! Besides, there is more to do here, it's more fun and you don't have to DRIVE everywhere! We deserve to be more expensive! (unless they are buying all cash... then they come first...LOL)
FYI: This home was not a FIXER FLIPPER, the sellers fixed it for themselves but got transferred to Irvine (now that's ironic is it not?). By the way, I know the sellers, they HATE Irvine (even though they are Conservatives) they miss our GHETTO and the fun, and the walking, and the beach and the marina.....
The listing agent will be thankful the stuffed shirt Self Righteous writer of of this BLOG for a PRICE DROP....it always attracts more potential buyers.
As for the Price:
Half the price...??? Good thing you're an accountant. Just run the comps and talk about the FACTS...
The last thing we need are mendacious comments that give a skewed picture of realty. Dig?
Alamitos Beach and Alamitos Heights are 2 distinctly different Long Beach neighborhoods. For the purpose of this comment I am going to assume that you meant Alamitos Beach. You would be wrong to ass-u-me that Alamitos Beach residents would rather be considered part of Belmont Heights or visa-versa. Long Beach is a community of neighborhoods, each with a completely different flavor and each is desirable in its own way.
ReplyDeleteIt is apparent that you are less informed than one should be who is addressing such controversial topics.
Perhaps you should stick to writing about that which you are familiar with, that being either Irvine or perhaps Afghanistan and accounting as you indicate in your profile and leave Long Beach to those of us who understand it.
Wow is all I have to say regarding Lauri Manny's comment
ReplyDelete"Perhaps you should stick to writing about that which you are familiar with, that being either Irvine or perhaps Afghanistan and accounting as you indicate in your profile and leave Long Beach to those of us who understand it." I think there is built up anger (possibly because the market is in a all time low) in you and you are taking it out on this informative and intelliegent person who is offering the public more outlooks on real estate.
Laurie,
ReplyDeleteLong Beach is a city of communities, sure, but are you saying they are all EQUALLY desirable or valuable?
Are you claiming people living in Alamitos Heights, with their lower property values and lower median incomes don’t believe Belmont Heights or Belmont Shore have more appeal and value? If you are saying that, then I'm concerned about your claims of "understanding" real estate.
Read my comment VERY. CAREFULLY.
"...sellers will "fudge" the borders and add "Belmont Heights" to the listing--although it is clearly smack dab in Alamitos Beach/Alamitos Heights."
Now, a reader bright enough to comprehend the overall point: that sellers might play with the neighborhood borders to add a perceived value, would look at this listing:
http://www.redfin.com/stingray/do/printable-listing?listing-id=1299841
…and agree it is an example of a listing adding “Belmont Heights” even though the surrounding listings clearly indicate the “Downtown Area” in their descriptions. Boy, that seems awfully far from Belmont Heights for it to be a typo.
Now compare that listing with this property--within spitting distance--that does not use “Belmont Heights”:
http://www.redfin.com/stingray/do/printable-listing?listing-id=1369901
Imagine that, they even have the same zip code!
The astute reader would conclude that my point is absolutely, 100%, indisputably correct.
Sellers sometimes do this with Alamitos Beach/Alamitos Heights/Belmont Heights/Beverly Hills/etc. to add appeal to their listings, which are in less desirable neighborhoods. For you to deny that, especially after I’ve just provided you with a glaring example, is inconceivable. Maybe I should have written “..clearly smack dab in the middle of Alamitos Beach/Alamitos Heights/Mars/Wherever” to help you out, but I assumed most people wouldn’t miss the big, blinking, overall point.
If you concede there is a premium for certain areas over others (which, you’d be the most unique agent I’ve ever met if you did not), and you agree that I just provided an example of what appears to be someone attempting to manipulate the boundaries of a more appealing area, then you agree with my point and this debate is over.
Your reversion to meaningless personal attacks is transparent and hilarious, especially because you make no attempt to address the core analysis of the posts.
You are simply picking out typos and technicalities. The last refuge of the outmatched.
But surely someone with your "expertise" can debate the facts and explain why my evaluations, based on simple economic principles, are incorrect or misleading, rather than spending time (that could be spent selling houses or better "understanding" the LB RE market) attacking the default Country/Occupation settings on Blogger.com.
Hi Hangenindaghetto,
ReplyDeleteThanks for posting. Although I fail to see at any point where you refute my points or calculations, I sincerely appreciate the effort.
I’m glad that you love your neighborhood and I’m happy to hear you feel safe walking there and parking your car on the streets. As stated, I would not choose to park my car on those streets. I apologize if that offends you.
I understand your position: I certainly wouldn’t want some “stuffed shirt” (whatever that is) telling people neighborhoods in proximity to the one I purchased a home is, in their opinion, unsafe to walk around at night. Just as I can’t convince you that Orange County, due to their award winning schools, low crime, good jobs, higher median incomes, and clean communities, justifies a premium over Long Beach, you will not convince me that I will feel secure in certain LB neighborhoods.
And I’m also sorry to be the one to break the news about the declining state of real estate values. If I had bought a house during the last few years, I would definitely be upset at the media reporting the implications of this severe housing deflation, and blogs that serve to present a contrarian point of view and a dose of harsh reality.
You say that the "last thing we need is mendacious comments that give a skewed picture of realty," but I propose that your "reality" has been skewed by commission-earners for too long. Instead of only getting information from biased sources (who don't pay their mortgage if they can't get enough people into houses), I strongly believe it's important to have another perspective grounded in sound economic principles.
If you follow financial news, leading economic indicators (rising unemployment, a weakening dollar, rampant inflation, increases in personal debt, rising foreclosures, housing inventory stacking up, billions in lender and bank write downs, etc.) point to a recession and a rude awakening for those who believed the unchecked property appreciation during the last few years was here to stay. It’s naïve to conclude this property will sell for asking price given the economic situation currently unfolding.
But, you seem to be taking my observations of Long Beach real estate and the economy personally. I can assure you, it's not my intention to offend you and it’s not worth your aggravation. Please remember the entire premise of this blog is that I ALSO love Long Beach and want to buy property here!
You asked me to “run the comps and talk about the FACTS,” but that’s YOUR job. I’ve already laid out my facts and calculations. If you have any desire to spur a productive debate outside of personal slights, then it is your responsibility to refute, with data, facts, calculations, and statistics, that my conclusion these prices do not align with market fundamentals is incorrect.
Plus, if this is such a smoking deal and it meets with market fundamentals, then I look forward to hearing about your offer on the property, or your attempts to convince family members and friends to swoop in and buy this place from your former neighbors.
Also, if I'm wrong about this property being overpriced, I want you to explain why it has been rotting on the market for 260+ days.
By the way, it’s obvious that if your former neighbors had followed the basic investing principles I discuss here, they wouldn’t have to sell their house in a down market due to a relocation. In fact, your post makes my point exactly: If you can’t come close to covering your mortgage by renting the property out, it’s called negative cash flow and it’s a bad, overpriced investment.
I would love to have a spirited debate about the fetaured property with you. And I appreciate the on-the-street information about the sellers and the property, but until you can provide some examples of how my conclusion this is an unwise investment is wrong, there are definitely more productive ways for you to spend your time online.
UPDATE:
ReplyDeletehttp://palazzo.vflyer.com/home/flyer/home/1650394
For rent at $2275/mo. Owner/Seller has refused to price down to market value, obviously, and removed the property from the SFR market.
I had the chance to buy this property when it was on the market for sale, just like anyone else did with the right qualifications. Nobody did. Why? Parking is horrendous. Backing two cars out onto a busy street always makes for a great way to start the day! Your neighbors are bars, nail salons and section 8 renters (nothing against section 8 renters, but laying out more than $3500/mo on a mortgage plus costs to live in a neighborhood that most of your neighbors are paying under $900 to live in doesn't make a whole lot of sense). Nevermind the fact that stucco on a 90 year old Craftsman is an abomination and there is a special place in purgatory reserved for those that practice this "lipstick" fix up.
My gut tells me this property would be lucky to sell for $300K sometime in the next 5 years. Very lucky, indeed.
But I'm not an "expert" like Laurie. Just an informed buyer, so I'm probably all mixed up about this though.